Ukrainian President Viktor Yushchenko has turned down Russia's offer of a $3.6 billion
loan to help Ukraine cover the cost of a sharp price increase for Russian natural gas.

Mr. Yushchenko said his country will use its own means to pay for Russian gas at what he called a correctly and objectively formulated reasonable price.

Mr. Putin offered the loan as he met in Moscow with Ukrainian and Russian negotiators seeking to break an impasse over prices for 2006.

Russia's state-run natural gas monopoly Gazprom has threatened to cut off deliveries to Ukraine unless it accepts a quadrupling of prices from $50 to between $220 and $230 per 1,000 cubic meters of gas.

Ukraine says such a sharp price increase would hurt its economy.

In Washington, a State Department spokesman, Adam Ereli, said U.S. officials have been in touch with both sides. He called for a compromise that will be minimally disruptive and meets the needs of both countries.